August 6, 2021

The International Monetary Fund maintains its growth projections and analyzes the effect of the Delta variation

Despite maintaining its 5.4 percent growth estimate for the Philippine economy for 2021, the International Monetary Fund (IMF) is keeping an eye out for the economic effect of new strains of the coronavirus illness in 2019. (Covid-19).

In response to e-mailed queries from the Philippine News Agency (PNA), Yongzheng Yang, IMF Resident Representative to the Philippines, said that their growth estimate for the nation has not changed as a result of the World Economic Outlook (WEO) Update published on July 27.

We are concerned about the Delta form of the coronavirus, and we are keeping an eye on the possible effect on the economy. We will keep you informed if there is any new information on this front,” he said.

The International Monetary Fund predicts that the country would expand at a rate of 7% in 2022.

Its growth estimate for the Philippines for this year is below the government’s 6 percent to 7 percent goal range, while its growth forecast for 2022 is at the lower end of the 7-9 percent target band established by economic managers, according to the World Bank.

Following the Article IV Consultation held by IMF executives with Philippine officials and representatives from the private sector from May 21 to June 11, the latter believe that fiscal space provides the government with the flexibility it needs to address the impact of the pandemic on the most vulnerable sectors of the population and the economy.

Constraints in the availability of Covid-19, as well as delays in the immunization program, have been highlighted as potential negative risks to growth.

Executives from the International Monetary Fund (IMF) have said that a rise in local Covid-19 infections would likely exacerbate the impact of external shocks on interest rates and inflation.

Recently, health authorities discovered local transmissions caused by the Delta variety, which scientists say is more infectious and has wreaked havoc in nations like India and Indonesia, among others.

As a result, health professionals have stressed the need of implementing tighter quarantine measures as soon as possible in order to avoid the spread of domestic Covid-19 infections.

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